(October 24 – 11:50 ET) – The Association for Investment Management and Research thinks that the uniform industry guidelines for how North American investment managers calculate and report their investment performance should be modified to make them compatible with comparable global standards

AIMR has issued a request for public comment on 11 specific modifications, additions and deletions that it says should be made to the AIMR Performance Presentation Standards (AIMR-PPS). About 75% of U.S. and 65% of Canadian investment managers use the AIMR-PPS to calculate and market their performance.

A detailed description of all proposed changes is posted on AIMR’s Web site at www.aimr.org/standards/pps. AIMR will accept comments until December 31.

While voluntary within the industry, the association says compliance with AIMR-PPS standards is widely viewed as a competitive necessity since it allows investors to make “apples-to-apples” comparisons of results among individual investment management firms.

The proposed changes would make AIMR-PPS standards consistent with the Global Investment Performance Standards (GIPS) that AIMR subsequently initiated and which are now being adopted worldwide, while keeping them relevant to the North American market. AIMR says the impact of the changes should be minimal, since the newer global standards were based on the AIMR-PPS standards in North America to begin with.

The recommended changes relate, for example, to fee-schedule disclosures, disclosure of business and personnel activities that could impact a firm’s investment performance, risk disclosures and verification methods. The changes would require some adaptation to software programs and orientation of verification services, for instance.

But according to AIMR’s vice president for standard-setting, Jessica Mann, “The proposed changes are an important next step in supporting the convergence to one worldwide performance standard. With rapid globalization of the investment industry, it is important that managers complying with the North American standards have a ‘passport’ to compete on an equal footing, anywhere in the world. This will be achieved through these changes, which will eventually lead to endorsement of AIMR-PPS as the North American version of GIPS.”
-IE Staff